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Enbridge to pay $177 million penalty for 2010 Michigan oil spill

Oil floats near a boom as workers using suction hoses try to clean up an oil spill of approximately 800,000 gallons of crude from the Kalamazoo River July 28, 2010 in Battle Creek, Michigan.  (Photo by Bill Pugliano/Getty Images)
Oil floats near a boom as workers using suction hoses try to clean up an oil spill of approximately 800,000 gallons of crude from the Kalamazoo River July 28, 2010 in Battle Creek, Michigan. (Photo by Bill Pugliano/Getty Images)

Enbridge Energy Partners will pay a $177 million penalty for the costliest inland oil spill in U.S. history under an agreement with federal officials.

The U.S. Environmental Protection Agency and the Department of Justice announced the settlement Wednesday over a 2010 pipeline rupture near Marshall, Michigan, that released an estimated 843,000 gallons of crude oil. A nearly 40-mile stretch of the Kalamazoo River was polluted as shoreline residents fled their homes.

The deal requires measures to prevent future spills, detect leaks and prepare for emergencies across Enbridge's Lakehead network, a web of 14 pipelines extending more than 2,000 miles across seven states.

Enbridge has agreed to spend at least $110 million on a series of measures to prevent spills and improve operations across nearly 2,000 miles of its pipeline system in the Great Lakes region. Enbridge will also pay civil penalties totaling $62 million for Clean Water Act violations -- $61 million for discharging at least 20,082 barrels of oil in Marshall and $1 million for discharging at least 6,427 barrels of oil in Romeoville.

In addition, the proposed settlement will resolve Enbridge’s liability under the Oil Pollution Act, based on Enbridge’s commitment to pay over $5.4 million in unreimbursed costs incurred by the government in connection with cleanup of the Marshall spill, as well as all future removal costs incurred by the government in connection with that spill.

Wednesday's settlement includes an extensive set of specific requirements to prevent spills and enhance leak detection capabilities throughout Enbridge’s Lakehead pipeline system - a network of 14 pipelines spanning nearly 2,000 miles across seven states. Enbridge must also take major actions to improve its spill preparedness and emergency response programs. Under the settlement, Enbridge is also required to replace close to 300 miles of one of its pipelines, after obtaining all necessary approvals. Enbridge’s Lakehead System delivers approximately 1.7 million barrels of oil in the United States each day.

This settlement will make the delivery of our nation’s energy resources safer and more environmentally responsible,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “It requires Enbridge to take robust measures to improve the maintenance and monitoring of its Lakehead pipeline system, protecting lakes, rivers, land and communities across the upper midwest, as well as pay a significant penalty."

Company vice president Brad Shamla says Enbridge has been humbled and will meet the terms.